PR Newswire
CALGARY, AB, June 21, 2021
Brookfield's "Total Return Swap" With Unnamed Parties Requires Full Disclosure and Should Not be Allowed to Interfere with Shareholders' Ability to Choose the Pembina – Inter Pipeline Transaction
CALGARY, AB, June 21, 2021 /PRNewswire/ - Pembina Pipeline Corporation ("Pembina") (TSX: PPL) (NYSE: PBA) today announced that Pembina and Inter Pipeline Ltd. ("Inter Pipeline") (TSX: IPL) have filed cross-applications with the Alberta Securities Commission (the "ASC") to remedy disclosure issues and coercive tactics by Brookfield Infrastructure Partners L.P. and its affiliates (collectively, "Brookfield") in relation to its inferior hostile take-over offer of Inter Pipeline (the "Take-Over Offer").
Pembina's President and Chief Executive Officer Mick Dilger added: "It is critically important that all shareholders involved in a large transaction be given transparency and a fair, unencumbered process to choose the deal that they determine to be in their best interests. This is equally important for sophisticated investors and individual retail holders. Brookfield cannot use its 'block' of shares to threaten the strategic merger with Pembina, while at the same time claiming that it does not control these shares and that they count toward acceptance of its tender offer. Brookfield is clearly conflicted and must step back and let Inter Pipeline's other shareholders choose the best offer."
Added Dilger, "Brookfield is pushing the same offer that has essentially been repackaged three times while trying to unfairly influence a democratic process to have that inferior transaction accepted. We are asking the ASC to bring some daylight into the process and protect shareholder rights."
The Inter Pipeline Board has unanimously recommended that shareholders support the strategic share-exchange transaction with Pembina (the "Strategic Combination"). In addition to greater immediate value, the Strategic Combination will give Inter Pipeline shareholders an immediate 175% increase to their monthly dividend, significant upside value due to the combined companies' synergies and accelerated growth outlook, and a tax-free rollover for taxable Canadian shareholders.
Summary of the Cross-Applications
In its June 18, 2021, cross-applications to the ASC, Inter Pipeline explained how Brookfield has used opaque and unidentified financial contracts that avoid early warning obligations, build a "block" to prevent Inter Pipeline shareholders from approving the superior Strategic Combination, and circumvent the minimum tender requirements of their own Take-Over Offer:
To ensure that Brookfield does not continue to use the Total Return Swap in a manner that harms Inter Pipeline shareholders and the capital market, Inter Pipeline is seeking relief from the ASC pursuant to the Securities Act (Alberta), including orders that:
In its cross-application to the ASC, Pembina joined Inter Pipeline, adopting the entirety of its cross-application. In addition, Pembina seeks a cease trade order with respect to any securities issued or exchanged in connection with Brookfield's Take-Over Offer.
Pembina seeks all of this relief to ensure fairness and to allow Inter Pipeline shareholders to make their own choice.
About Pembina
Pembina is a leading transportation and midstream service provider that has been serving North America's energy industry for more than 65 years. Pembina owns an integrated system of pipelines that transport various hydrocarbon liquids and natural gas products produced primarily in western Canada. Pembina also owns gas gathering and processing facilities; an oil and natural gas liquids infrastructure and logistics business; and is growing an export terminals business. Pembina's integrated assets and commercial operations along the majority of the hydrocarbon value chain allow it to offer a full spectrum of midstream and marketing services to the energy sector. Pembina is committed to identifying additional opportunities to connect hydrocarbon production to new demand locations through the development of infrastructure that would extend Pembina's service offering even further along the hydrocarbon value chain. These new developments will contribute to ensuring that hydrocarbons produced in the Western Canadian Sedimentary Basin and the other basins where Pembina operates can reach the highest value markets throughout the world.
Purpose of Pembina:
To be the leader in delivering integrated infrastructure solutions connecting global markets:
Pembina is structured into three Divisions: Pipelines Division, Facilities Division and Marketing & New Ventures Division.
Pembina's common shares trade on the Toronto and New York stock exchanges under PPL and PBA, respectively. For more information, visit www.pembina.com.
Forward-Looking Statements and Information
This document contains certain forward-looking statements and forward-looking information (collectively, "forward-looking statements"), including forward-looking statements within the meaning of the "safe harbor" provisions of applicable securities legislation, that are based on Pembina's current expectations, estimates, projections and assumptions in light of its experience and its perception of historical trends. In some cases, forward-looking statements can be identified by terminology such as "expects", "will", "would", "anticipates", "plans", "estimates", "develop", "intends", "potential", "continue", "could", "create", and similar expressions suggesting future events or future performance.
In particular, this document contains forward-looking statements pertaining to, without limitation, the following: the Strategic Combination, including the anticipated benefits thereof to Pembina's and Inter Pipeline's securityholders and stakeholders, both generally and, in relation to Inter Pipeline's securityholders, relative to the Brookfield Bid; future dividends, including increases in the amounts thereof, which may be declared on Pembina's common shares on any future dividend payment date; the anticipated synergies associated with the Strategic Combination; and the impact of the remedies sought in connection with the cross-applications made to the ASC.
These forward-looking statements are based on certain assumptions that Pembina has made in respect thereof as at the date of this news release regarding, among other things: the ability of Pembina and Inter Pipeline to obtain the remedies sought from the ASC; the ability of the parties to satisfy the conditions to closing of the Strategic Combination in a timely manner and on acceptable terms; that favourable circumstances continue to exist in respect of current operations and current and future growth projects; and the continuance of anticipated business conditions.
In respect of the forward-looking statements and information concerning the potential increases in Pembina's dividend following completion of the Strategic Combination, Pembina has provided such in reliance on certain assumptions that it believes are reasonable at this time, including assumptions in respect of: prevailing commodity prices, margins and exchange rates; that the combined entities future results of operations will be consistent with past performance and management expectations in relation thereto; the continued availability of capital at attractive prices to fund future capital requirements relating to existing assets and projects, including but not limited to future capital expenditures relating to expansion, upgrades and maintenance shutdowns; the success of growth projects; future operating costs; and that there are no unforeseen events negatively affecting the businesses of Pembina or Inter Pipeline or the anticipated growth projects. Pembina will also be subject to corporate legal requirements in respect of declaring dividends at such time.
Although Pembina believes the expectations and material factors and assumptions reflected in these forward-looking statements are reasonable as of the date hereof, there can be no assurance that these expectations, factors and assumptions will prove to be correct. These forward-looking statements are not guarantees of future performance and are subject to a number of known and unknown risks and uncertainties including, but not limited to: any of the remedies sought from the ASC in the counter-applications may not be granted in the manner requested; the ability of the parties to receive, in a timely manner, the necessary regulatory, court, securityholder, stock exchange and other third-party approvals, including but not limited to the receipt of applicable competition approvals; the ability of the parties to satisfy, in a timely manner, the other conditions to the closing of the Strategic Combination; and the failure to realize the anticipated benefits or synergies of the Strategic Combination following closing due to integration issues or otherwise. In addition, the closing of the Strategic Combination may not be completed, or may be delayed if the parties' respective conditions to the closing of the Strategic Combination, including the timely receipt of all necessary regulatory approvals, are not satisfied on the anticipated timelines or at all. Accordingly, there is a risk that the Strategic Combination will not be completed within the anticipated time, on the terms currently proposed or at all.
This list of risk factors should not be construed as exhaustive. Readers are cautioned that events or circumstances could cause results to differ materially from those predicted, forecasted or projected. The forward-looking statements contained in this document speak only as of the date of this document. Pembina does not undertake any obligation to publicly update or revise any forward-looking statements or information contained herein, except as required by applicable laws. The forward-looking statements contained in this document are expressly qualified by this cautionary statement.
SOURCE Pembina Pipeline Corporation